Calculate the total return and annualized return on any investment, given the initial amount, final value, and holding period.
Return on Investment (ROI) measures the profitability of an investment as a percentage of the amount originally invested.
Total ROI equals (final value minus initial investment) divided by initial investment, times 100. Annualized ROI uses the CAGR formula: (final/initial) to the power of (1/years), minus 1.
Enter your initial investment and final value, and optionally the holding period in years for an annualized return, then click Calculate.
Example: An investment growing from 1 lakh to 1.75 lakh rupees over 5 years has a total ROI of 75% and an annualized ROI of about 11.8%.
Why does annualized ROI differ from total ROI. Total ROI shows overall growth, while annualized ROI (CAGR) shows the equivalent constant yearly growth rate, useful for comparing investments of different durations.
Should ROI account for taxes and fees. This basic calculation does not; net ROI after taxes and fees would be lower than the gross figure shown here.